How to Save Money on Your Car Insurance

If you’ve noticed your car insurance costs going up, you’re not alone. On average, people in the U.S. are paying more for car insurance each year. In some states, the yearly premium can be over $3,500, and in places like New York, it can be over $4,000.

Given these rising prices, here are some easy-to-understand tips to help you save money on your car insurance:
 

1. Shop Around and Compare

Don’t just stick with your current insurance company out of habit. About 30% of people surveyed switched providers in the last five years, and most did it to save money—over $460 a year on average.

Compare quotes from different insurers every year or so to see if you can get a better deal.
 

2. Raise Your Deductible

If you can afford to pay a bit more out of pocket if you get into an accident, increasing your deductible can pay off. Raising it from $500 to $1,000 can lower your annual premium by 20-25%, saving you as much as $525 a year.

But make sure you have enough money set aside to cover that higher deductible if needed.

Check out: Top 5 Car Insurance Companies of 2025
 

3. Drop Collision and Comprehensive on Old Cars

If you drive an older car, it might not make sense to have both collision and comprehensive coverage. When the cost of this coverage is more than 10% of your car's value, it’s usually better to drop them.

Just make sure you still have enough liability coverage to protect yourself if you cause an accident.
 

4. Take a Defensive Driving Course

Some insurance companies offer discounts if you take a safe driving class. For example, taking a defensive driving course could save you about $233 a year. You'll need to repeat these courses every few years to keep the discount.
 

5. Drive Less

Insurance companies often give discounts to drivers who put fewer miles on their cars each year—typically under 10,000 miles. If you’re working from home or have changed jobs and are driving less, let your insurer know.

Some companies offer special programs where you can report your mileage for extra savings.
 

6. Bundle Policies

Many companies will offer a discount if you bundle, or buy, your home and auto insurance from them. This discount can be up to 30 percent, but it depends on your personal situation, so it’s a good idea to check if bundling really saves you money.
 

7. Pay Small Claims Out of Pocket

For small accidents that don’t involve another driver, like scratching your bumper, consider paying for repairs yourself instead of filing a claim. This can help prevent your premiums from going up later.
 

8. Use an Independent Insurance Agent

Independent agents work with multiple insurance companies, not just one. They can help you compare prices and find the best deal for your needs.
 

9. Consider Dividend Policies

Some insurance companies offer a special type of policy that pays dividends—meaning you might get money back at the end of the year. Even though these policies can cost more upfront, the dividends can lower your overall costs.
 

10. Try Driver Monitoring Programs

Some insurers will give you a discount—sometimes almost $1,000—if you let them track your driving habits, either with a phone app or a special device in your car.

Before signing up, ask how your data will be used and whether bad driving could actually raise your rates instead of lowering them.
 

11. Make Sure You Have the Right Coverage

The most important part of your insurance is liability coverage, which pays for injuries or damage if you cause an accident. Make sure you have enough.

Each state has minimum coverage amounts, but it’s often a good idea to buy more protection if you can afford it.

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